Underperforming forex reserves

Malaysia’s international reserves stood at US$114.6bil (RM486.5bil) as at end-December 2022, down from US$116.9bil (RM496.3bil) as at end-December 2021.

PETALING JAYA: Despite a record trade surplus in 2022, Malaysia’s international exchange reserves underperformed, declining on an annual basis last year. So, where did the money go?

According to analysts, the gap reflected, in part, the foreign portfolio outflows through 2022, pressure on the ringgit, as well as Bank Negara’s intervention in the foreign exchange (forex) market to absorb and stabilise the impact of the US Federal Reserve’s (Fed) interest rate hikes and China’s deteriorating growth outlook on the local currency during the year.